SEC explores blockchain technology to enhance trust, transparency in capital market

The Securities and Exchange Commission has said that it is exploring blockchain technology to boost trust and transparency in the capital market.

The Director-General of the SEC, Dr Emomotimi Agama, made this known at the annual conference of the Capital Market Correspondents Association of Nigeria on Saturday in Lagos.

Agama, who was represented by the Divisional Head, Legal, and Enforcement, Lagos Zone Office, John Achile, speaking on the theme “Banks Recapitalisation: Bridging the Gap Between Investors and Issues in the Nigerian Capital Market,” noted that the adoption of blockchain technology would ensure trust.

According to Investopedia, blockchain is a decentralised digital ledger that securely stores records across a network of computers in a way that is transparent, immutable, and resistant to tampering.
He said, “Harnessing innovation for inclusive growth is key to bridging the gap between issuers and investors.

Digital platforms have enhanced market accessibility, enabling even retail investors in remote areas to participate in recapitalisation exercises.
“The SEC is exploring the integration of blockchain technology for secure and transparent transaction processing, a step that will redefine trust in the market.”
Achile also quoted the SEC DG as saying that the oversubscription of most recapitalisation offers in 2024 reflects strong investor confidence and “To sustain this momentum, the SEC has intensified efforts to enhance disclosure standards and corporate governance practices. Expanding financial literacy campaigns and collaborating with fintech companies to provide low-entry investment options will democratise access to the capital market.

“The SEC remains steadfast in its mission to create an enabling environment for seamless and transparent capital formation. Our efforts are anchored on providing issuers with clear guidelines and maintaining open lines of communication with all market stakeholders, reducing bureaucratic bottlenecks through digitalization, ensuring timely review and approval of applications, and enhancing regulatory oversight to protect investors while promoting market integrity.”

He emphasised that some of the challenges in the market can be addressed by technology to deepen financial inclusion and enhance market liquidity.

“Developing innovative financial products, such as green bonds and sukuk, to attract diverse investor segments. The success of recapitalisation efforts depends on collaboration among regulators, issuers, and investors,” he concluded.